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A monthly review of the latest developments in Japan’s IT, telecom, and life sciences sectors

November 2002 - Volume V, Issue XI

Triangle Technologies is the leading Japan Israel business development and investment advisory firm
www.triangletech.com

Dan's Desk

From Triangle's CEO

Dear friends:

Two interesting things to report to you in this Dan's Desk. One is Triangle's invitation-only Dec 16th seminar, and the other is our new Japan Advisory Board.

I. December is approaching and with it, Triangle Technologies' Annual Japan Seminar. So first, mark you calendars - Monday December 16th, 14:30. Space is limited, by prior registration only, and registration is brisk already. The title: Winning With Japan - opportunities and strategies for succeeding in the world's second largest economy.

Why should you attend?

II. What do the present CEO's of Japan Communications and Akamai Japan, and the former CEO of Toshiba America have in common? All of them are close personal friends, and all of them have agreed to join our newly formed Advisory Board (www.triangletech.com/html/pr/advisory_board.html). Okatomi-san, Sanda-san, and Naito-san represent a unique trio of Japanese high technology executives, and they will help guide us in the increasingly exciting and always competitive Japanese tech scene. And they bring an additional legacy of senior exec positions (CEO and VP level) at Time-Warner Japan, Motorola, Sony, Apple Japan... And they all have strong entrepreneurial spirits!

Good luck

Dan

***TRIANGLE TECHNOLOGIES NEWS***

+SONY (SO-NET) DEPLOYS SPHERA'S HOSTINGDIRECTOR

Sphera Corporation, in conjunction with Japanese master distributor Mitsui, announced that Sony Communication Network Corporation (So-Net), the Tokyo-based Internet access and network solutions provider, has deployed Sphera's HostingDirector software as the service platform for its "Next Do" Web hosting service. Triangle technologies assisted Sphera in forming its alliance with Mitsui.

***ISRAEL-JAPAN NEWS***

+MITSUBISHI HOME NETWORKING CHIP TO CONTAIN ITRAN TRANSCEIVER

Mitsubishi Electric announced it was developing a single-chip power line communication integrated circuit for home networking, in cooperation with Itran Communications and Microsoft, allowing consumers to manage home appliances via the Internet.

+ALVARION WINS FOLLOW-ON ORDER FROM JAPAN'S SPEEDNET

Alvarion (Nasdaq: ALVR) has received a follow-on order for 20,000 BreezeACCESS subscriber units from SpeedNet Corporation, the Japanese wireless ISP. The follow-on order doubles the total units bought by SpeedNet, and is estimated at $5 million.

***BUSINESS NEWS***

+NEXT-GENERATION SUBSCRIBERS KEEP ON FLOWING IN

KDDI and J-Phone are continuing to expand their subscriber bases of next-generation services.
KDDI reported more than 3 million subscribers for its 3G services based on cdma2000 1x technology, while J-Phone announced the number of subscribers for its picture mail service reached 7 million. Total sales of camera-phones have reached 8 million units, which represents 84% of worldwide units sold.

+EXECS EXPECT TO ADOPT IP PHONES

More than half of small businesses expect to adopt discount Internet Protocol phones in the near future, according to a recent survey. 54.2% of executives polled expect this move to occur within the next three years. Consequently, KDDI President Tadashi Onodera was quoted as saying that 40 to 50 percent of fixed-line voice traffic in Japan is expected migrate to IP phones by 2005.

+SOFTWARE MARKET TO HIT ALMOST $20B IN 2006

IDC Japan said that Japan's software market, which in FY2001 was worth $14.1 billion, would grow to sales of $19.6 billion in 2006. IDC expects infrastructure software to account for 39% of the total, application software for 38.3%, and application development tools 22.7%.

+JAPAN'S BROADBAND USERS SURPASS 6M

The number of broadband Internet users reached 6,138,000 at the end of September 2002, showing an increase of 365,000 in one month, according to the Public Management, Home Affairs, Posts and Telecommunications Ministry. FTTH showed the most impressive growth, from 114,608 users in August to more than 120,000; CATV Internet had 1,800,000 subscribers, an increase of 42,000 users.

+IDC: NUMBER OF BROADBAND SUBSCRIBERS IN JAPAN TO REACH 18M BY 2006

At the end of 2001, Japan had 2.8 million broadband subscribers and IDC predicts that by the end of this year, the number of subscribers will have risen to 7 million. IDC forecasts that by 2006 there will be around 12 million ADSL subscribers in Japan, compared to around 5 million today.

+NEC LEADS WITH 24.6% SHARE OF JAPAN'S APRIL-JUNE PC SHIPMENTS

EC Research Corp. (ECR) released data on Japan's PC shipments for the April-June quarter of 2002, saying that the top three producers of PCs, including PC servers, were NEC (24.6%), Fujitsu (18.9%), and Sony (12.0%). The data show that NEC, which had been losing market share to its rivals, has staged a successful comeback, and that fifth-ranked Dell Computer KK has also experienced increased sales.

+HACKER TAMPERS WITH NTT DOCOMO WEB SITE – KYODO

An unidentified hacker broke into the Web site of NTT DoCoMo and tampered with part of its contents. The tampered page, which is for corporate customers, has been rendered inaccessible, while the hacker substituted the entire contents of the original Web page for his name and several slogans. In Japan, hackers have recently succeeded in tampering with the Web sites of Sanyo Electric Co. and Fuji Photo Film Co., but this presents the first successful hacking of a site belonging to a carrier with expertise in Web technology.

+NPA REPORTS HACKERS ATTACKING ITS COMPUTERS

Japan’s National Police Agency reported about 51,000 attempts by hackers to break into police computer systems throughout the country from July to September. The NPA's Cyber Force unit said that on average each system was the recipient of 10 hacking attempts a day over the three-month period.

+OVER 1 IN 5 MAJOR JAPANESE FIRMS MONITOR EMPLOYEE E-MAIL

More than 20% of major Japanese companies monitor e-mail by employees to block leaks of corporate secrets and customer information, according to a recent survey. The survey found that 50 of the 100 companies surveyed have new employees sign confidentiality agreements, and that 57 have in-house rules to punish employees who leak corporate secrets. 29 companies separate their networks from outside networks, and 90 companies use firewall systems.

+FOREIGN FIRMS EMPLOY 1 MILLION

Despite the big layoffs in the investment-banking sector, foreign firms are gaining momentum in Japan. A recent JETRO poll has found that the number of people working for foreign companies in Japan now totals over 1 million, or about 2.3% of Japan's workforce. 56.4% of these employees are in the manufacturing sector, 13.6% in retail and restaurants, 13.5% in finance, and 12.7% in services. One possible reason is the recent increase in international M&A activity in the Japanese market.

***GENERAL TECHNOLOGY NEWS***

+FUJITSU TO ADOPT LINUX IN LARGE-SCALE MISSION-CRITICAL SYSTEMS IN 2005

Fujitsu announced its business reinforcement measures on Oct. 23, in which Linux is positioned as the basic OS for the next-generation IT infrastructure. Currently, the company's support for Linux is limited to some models including Internet servers. However, Fujitsu will make advancements in middleware and system management software to make them Linux-enabled, and in 2005 it will extend this to large-scale mission-critical systems, such as banking systems.

+NEC IMPLEMENTS DOCOMO'S STREAMING SERVICE SYSTEM ON ITS PLATFORM

NEC Solutions announced that it has implemented M-stage V Live, NTT DoCoMo's video streaming service, on StreamPro, its streaming content distribution platform. M-stage V Live distributes live and archived videos to PDAs connected to DoCoMo PHS handsets.

+NEC USES NANOTUBES IN DNA-SORTING BIOCHIP

NEC has applied the techniques of nanotechnology to create biochips that can rapidly identify DNA and protein molecules. NEC's Fundamental Research Laboratories built tiny pipelines of silicon nanotubes fine concave troughs and placed them on semiconductors about 1cm by 3cm. By measuring the difference in paths taken and the speed of movement, researchers said they could successfully identify three patterns of DNA materials of different size.

+SHARP BUILDS CPU ON GLASS, 3D DISPLAY

Sharp says that it has produced a "world first" CPU and ancillary circuitry on a piece of glass 15mm square and 1mm thick. According to the company, this is the first time that an advanced working CPU has been built on glass. Sharp claims that the process has huge implications for the electronics industry, especially the consumer electronics space, allowing ultra-thin and lightweight "sheet computers" and "sheet TVs”. On that note, Sharp also presented recently a new display capable of switching from 2D to 3D or vice versa.